White House: Debt Ceiling Must Be Raised

[PrincessFiona]

White House: Debt Ceiling Must Be Raised

Wed Nov 3,12:54 PM ET White House - AP


By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - The Bush administration announced Wednesday that it will run out of maneuvering room to manage the government's massive borrowing needs in two weeks, putting more pressure on Congress to raise the debt ceiling when it convenes for a special post-election session.



Treasury Department (news - web sites) officials announced that they will be able to conduct a scheduled series of debt auctions next week to raise $51 billion. However, an auction of four-week Treasury bills due to be completed on Nov. 18 will have to be postponed unless Congress acts before then to raise the debt ceiling.


"Due to debt limit constraints, we currently do not have the capacity to settle our four-week bill auction scheduled to settle on Nov. 18," Timothy Bitsberger, acting assistant Treasury secretary for financial markets, said in a statement.


Congress is scheduled to return for a lame-duck session beginning on Nov. 16 to deal with the debt ceiling, an omnibus spending plan for the rest of this budget year and other matters.


The Republican-controlled Congress put off dealing with the debt ceiling before adjourning in October, preferring not to force members to vote on the politically sensitive issue of adding to the national debt before the November elections.


The government hit the current debt ceiling of $7.384 trillion on Oct. 14, forcing Treasury to begin a series of bookkeeping maneuvers to keep financing the government's normal operations without breaching the debt ceiling. But Treasury Secretary John Snow has warned that those special measures would last only until mid-November.


The Treasury Department's actions have included reducing the amount of debt in government trust funds to free up room for further borrowing from the public. The nonpublic debt is then replaced in the trust funds once the debt ceiling is increased along with any lost interest payments.


Republicans have proposed that the debt ceiling be raised by $690 billion to $8.074 trillion, an amount that would get the government through next September, when the 2005 budget year ends.


The need to raise the debt ceiling reflects the record budget deficits of the past two years. The deficit for the 2004 budget year, which ended Sept. 30, was an all-time high of $413 billion, surpassing the old mark, in dollar terms, of $377 billion in 2003.


Democrats blame the surging deficits on Bush's tax cuts, while the administration contends the tax cuts provided critical economic stimulus to help lift the economy out of the 2001 recession.


The administration says the president has a plan to cut the deficit in half by 2009, but critics contend that the real problems will come in later years as retiring baby boomers put unprecedented strains on Social Security (news - web sites) and Medicare.


In its announcement Wednesday, Treasury said it will sell $51 billion in new securities next week including $22 billion in three-year notes on Monday, $15 billion in five-year notes on Tuesday and $14 billion in 10-year bonds on Wednesday.
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[SueC]

I've got an idea--let's raise the debt ceiling!
(Is there an emoticon for sarcasm?)

[Rapunzel]

I've got a better idea - let's cut the glut of government spending and then require the federal government to fund only those things they should fund under the Constitution (such as a military and currency printing among a few other things)!

Oh wait, that would never work because too many people are addicted to a nanny government with rampant "social" programs....

I submit that those who support the federal government funding Social Security, welfare, educational funding to the states, and myriad other costly things really don't have any ability to complain about our government's debts without looking a bit hypocritical. The alternatives are to either do away with these superfluous programs on the federal level OR to significantly raise federal taxes on all citizens and take us into a more socialist state such as exist in Europe.

Jennifer

[DCJenn]

So, Jennifer-

Explain to me who will care for the aging developmentally disabled population, many of whom are living with elderly and frail parents?

Who will make sure that these people are cared for? Have appropriate medications, behavioral supports, and places to live and people to help them?

What about people with traumatic brain injury or spinal cord injuries? Is it fair to expect that a family take care of an injury that they have no experience dealing with? Christopher Reeve's death was unique only because it took so long to happen- because he could afford the BEST in nursing, PT and OT. Skin breakdown happens- and once it starts it's nearly impossible to stop. So, who pays for specialized nursing care or wound care?

And what about people who don't have family members? What about people who outlive their kids? Who helps them? and who pays for that care? Because as nice as it would be for people with disabilities to have people in their lives who are not paid to be there, it's RARE that it actually happens. What about siblings- what would happen if I had a disabled sibling? I certainly wouldn't want to risk changing the entire support network of my sibling because my husband is in the Army and we have to move every three years. What would happen to that sibling?

What about people who are poor? or recent immigrants who don't understand the system. Who provides the education and the support for those groups?

We can surely decide as a society to walk away from social supports because it's beyond the scope of the government. However, no one asks to be retarded. Remember that...

Jenn

[Rapunzel]

My argument is that it is not the federal government's place to do any of the things you listed.

The powers not granted to the Federal government are reserved for the states. The power to create social agencies is not a power given to the Federal government in the Constitution, thus, it is up to the individual states to solve these issues.

This has nothing to do with being heartless. And everything to do with the structure and purpose of our different portions of government.

I wrote a paper on the never-ending power-struggle between the federal and state governments waaaay back in college. One of the ways in which the federal government has overstepped its designated power is by instituting an enormous amount of programs that it has no Constitutional right to create or support. It is a general bloating of Federal government that was the worry of the writers of the Constitution and the reason we have the 10th Amendment:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

So, you see, my argument is not a Republican one, it is a Libertarian one. Chris (Dagny) might be able to better explain the exact Libertarian stance on the subject, but the overall gist of their view on this is one that I share. And, the argument is NOT that the problems you listed, Jenn, should be ignored - rather it is that the federal government is overstepping its bounds if it attempts to "solve" these issues. These problems are to be solved by the states or given to the "people" as individuals and charities if the states choose to not confront the issues.

Jennifer

[PrincessFiona]

Jenn, this is the problem that I have too...forgive my disjointed response. The conservatives want to completely do away with abortion but they also don't want there to be any help for families who have children who are born severely brain damaged and retarded (for example). I am also pro-life, but I understand the limitations of my views.

What do people do who for healthcare or money when they lose their jobs and can't find one soon enough, have a handicapped child, suffer serious illness in their family and either have no health insurance or insurance that pays very little? What about the old people, poor people and those who are seriously mentally ill.


kris

[Rapunzel]

Kris, what I am saying is that these issues SHOULD be looked at and there SHOULD be social programs out there.

HOWEVER, the federal government is NOT the institution that should be funding these programs. It is up to the individual states to do so.

I completely support some types of social programs - but I believe that having the federal government in charge of them is unconstitutional. Having the states funding and running them IS constitutional.

Jennifer

[DCJenn]

OK-

So, it's the states responsibility to ensure that people are cared for?

Let me tell you how well that's been working. The entire reason for the project that I am working on is that the Feds gave the authority to the states to ensure that people with disabilities were appropriately cared for. They gave the states the money and some minimum standards (you know, people are assured due process, people have access to their money, people will not have restictive procedures placed upon them with out their consent or the consent of their guardians...)

and guess what? people died. A LOT of people died. or were abused or had their funds stolen from them. sterilized. had their teeth ripped out because it's easier to deal with than teaching people to brush their teeth. Locking people in time out rooms because it's easier than teaching people alternate behaviors. Allowing people to wallow in filth because it's easier than adapting their environment to meet their needs. Allowing people to attack each other because it's easier than taking the time or the money to develop different ways of dealing with things.

It doesn't work. I have been in homes that the states certified that are literally covered in feces. That people are walking around with four inch human bites. That the couch cushions are sitting in pools of urine.

(and all of our reports are available to the public...)

Jenn

[PrincessFiona]

How would the STATES do that, Jennifer (Rapunzel)? They would have to take in more money from the people in order to do it...you are just shifting the tax burden from the fed. govt to the states but won't be lessening the burden of taxes.

Also..who pays for schools in this grand anti-govt. plan? What do people do who can't afford to go to private schools...

[PrincessFiona]

Jenn,

Shocking as this will sound to all, this is why my husband and I have an agreement about...helping each other die when we get old and can no longer care for ourselves...

[SueC]

When I was an OT I often worked with the population Jennifer described. Not only was the family absolutely strapped because their child had a prolonged hospitalization due to a TBI (whatever the ailment was), one parent often had to quit (or take a significant leave) from a full-time job in order to help care for the patient, modifications had to be made to their homes and cars, those fancy motorized wheelchairs are more expensive than most cars, the list goes on and on. Only a member of the leisure class could afford that. My parents both had master's degrees and good paying jobs but if something like that had happened to me or my sisters, they would have gone bankrupt. It's no fun for the average, healthy American to pay for these programs but what else should we do? God forbid you should ever need these services, you'll be thankful they are there.

This is a really interesting thread. I really don't have enough knowledge on the subject to post something worthwhile, but I do have a question. If the majority of the social programs were left in the hands of individual states, they would then vary by state, right? So wouldn't you see lots of people moving to the states with better programs?? I would move to another state if WI stopped funding public schools.
And I agree with kris. I don't see how holding the state responsible for social programs would ease tax burdens. It has to be paid for either way, what difference does it make if the state taxes you or the federal government does?

[Rapunzel]

So, should we simply ignore the Constitution because mistakes have been made?

(btw, Jenn, the example you sited still has the federal government distributing the funding so it's not exactly something that the states are in charge of).

Jennifer

[Auspicious]

If the majority of the social programs were left in the hands of individual states, they would then vary by state, right? So wouldn't you see lots of people moving to the states with better programs??

And a widening gap between the haves and the have-nots, I think. Public education is supposed to be the great equalizer and the foundation of the meritocracy.

[PrincessFiona]

So, should we simply ignore the Constitution because mistakes have been made?


Jennifer

Do you think that our founding fathers meant for the constitution to be an inflexible document that would not change in hundreds of years even as the world changes? Would the founding fathers want us to be so held to the words that they wrote at a completely different period in time with different issues that we would not change it even if it meant keeping the status quo was detrimental to our people?